# Effect Size Rescaling

## Z₁ Variation Decomposition

| Metric | Value |
|---|---|
| Total SD | 1.3740 |
| Within-country SD | 0.2350 |
| Between-country SD | 1.3561 |
| IQR (Q75 − Q25) | 2.5568 |
| Q25 | -2.1388 |
| Q75 | 0.4180 |

## Rescaled Effect Sizes

| Variation | ΔZ₁ | Δlog(REER) | % REER Change |
|---|---|---|---|
| 1 unit (referee's scenario) | 1.000 | -1.2411 | -71.1% |
| 1 within-country SD | 0.2350 | -0.2916 | -25.3% |
| IQR | 2.5568 | -3.1732 | -95.8%† |
| Korea 1990→2020 | 1.7810 | -2.2103 | -89.0%† |

*Baseline Z₁ coefficient = -1.2411 on log(REER). Dep var is natural log of REER index (base ≈ 100). A 1-unit change in Z₁ is far outside the within-country range (within SD = 0.2350).*

*†The IQR and Korea rows span cross-sectional or multi-decade variation far exceeding the within-country range on which the coefficient is identified. These figures illustrate the range of the data, not a historical decomposition or causal prediction. The economically meaningful effect size is the within-country SD row (25% depreciation per 0.235 Z₁ unit), which reflects the variation the panel estimator actually exploits.*